ESG Investment Policy, Alma Mundi Ventures SGEIC

1. Introduction

   
   1.1. Purpose

   
   Alma Mundi Ventures, SGEIC, S.A., (“Mundi Ventures”) has adopted this ESG Investment Policy (“The Policy”) in relation to the way it integrates sustainability risks in its investment decision-making process, in compliance with Article 3 of the EU Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019) (‘SFDR”).
   The Policy will be reviewed at least annually and updated whenever needed.
   Further disclosures are required under Article 10 of SFDR, including a description of the environmental or social characteristics of the Mundi Ventures Funds, along with information on the methodologies used to access, measure and monitor such characteristics. This information is available on request.

   
   

   1.2. Scope

   
   

   The Policy applies to the existing funds inter alia “Alma Mundi Insurtech Fund II FCRE”, “Alma Mundi FutuRetail Fund FCRE”, ”Alma Mundi Innvierte Fund FCRE”, ”Alma Mundi Fund II, FCRE”, ”Alma Mundi Insurtech Fund FCRE” and future funds managed by Mundi Ventures including everyone involved in Mundi Ventures’ operations (including members of the board of directors, partners, employees as well as advisory and business partners, as well as all future functions not specified here).

2. Investment Philosophy

2.1. Sustainability Vision

Mundi Ventures manages thematic funds and strives to achieve superior market returns alongside positive societal impact wherever possible. We are fully supportive of sustainable value creation and believe that integrating ESG risks and opportunities is the best way to create long-term value and returns for our investors. Our ESG vision goes beyond negative screening but to support our purpose-driven founders by co-creating positive societal impacts and ESG driven competitive advantages that next generation companies are required to be equipped with.

2.2. Definition

Mundi Ventures define ESG and Impact as the followings;

• Environmental factors: Business operation that can negatively or positively affect Climate change, Resource depletion, Water, food and electronics waste, Water and Soil Pollution, Deforestation, Biodiversity loss in terrestrial and aquatic ecosystems.

• Social factors: The treatment of employees including their pay; health and safety; labour conditions; human rights; gender, socio economic and racial diversity and inclusion. The management of supply chain and the treatment of all stakeholders including customers and communities.

• Governance factors: Institutional framework for anti-bribery and corruption, cyber security and data privacy, board diversity and structure, and code of ethics and compliance.

• Impact: Positive impact from business operations towards United Nations 17 Sustainable Development Goals.

  
  

  The above list of ESG and impact factors is not exhaustive, and Mundi Ventures will continue to review, refine, and expand it as necessary. We closely follow regulatory developments to guide what qualifies as ESG, Impact, and Sustainable, including compliance with the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR). Additionally, we align with voluntary frameworks such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Institutional Limited Partners Association (ILPA) principles.

2.3. Approach

To achieve our sustainability vision, we integrate ESG and impact considerations throughout the entire investment cycle. There are multiple approaches to incorporating ESG factors into investment decision-making. At Mundi Ventures, we use these factors to assess both the potential risks and opportunities, ensuring accurate valuation and effective risk management. Moreover, we prioritize purpose-driven founders who aim to create positive societal impact.
In practice, we apply various ESG and impact frameworks and processes at three key stages of the investment cycle

• A due diligence framework embedded in our investment decision-making process.

• An engagement framework that serves as a blueprint for sustainable growth with our portfolio companies.

• A reporting framework for our annual ESG disclosures and data collection activiies.

3. Implementation approach in the investment lifecycle

3.1. Sourcing

Across funds, we look for startups that are led by diverse backgrounds and purpose driven founding teams, as we believe diverse founding team with personal mission leads to higher performance.
As a thematic investor, we take thesis-driven approach to identify the best opportunities. Industry specific material sustainability risks and opportunities are considered as part of the sector specific deep dives. For example, we performed a climate risk sector, recycled material sector and silver economy sector deep-dives in 2023 – 2024 as part of such sourcing effort.
At the early founder engagement phase, the investment team evaluates top 5 (five) ESG topics: Impact-mission alignment, CO2 measurement, >25% female managers and Code of Conduct.
Finally, we apply our exclusion list to make sure we conduct negative screening.

3.2. Due Diligence

ESG team performs three sustainability assessments as follows:

• ESG risk and opportunity assessment on all potential investments.

• Impact assessment if the startup claims to have a positive societal impact.

Climate risk assessment if the startup has physical assets and international operations.
We use our proprietary framework based on the five dimensions of sustainability as outlined by the Sustainability Accounting Standards Board (SASB) Materiality Finder, in conjunction with ESG indicators from the Institutional Limited Partners Association (ILPA), ESG_VC, VentureESG, IRIS+ (Impact Reporting and Investment Standards), the Impact Management Project (IMP), and the Initiative Climat International (iCI). Additionally, we apply Principal Adverse Impacts (PAI) metrics by SFDR to safeguard against downside risks.

3.3. Appraisal

Investment committee will consider the financial due diligence and sustainability assessments upon choosing investment project. When severe ESG risk(s) are found during the due diligence process, Investment team and ESG team will set a checkpoint for such risks to be reviewed on periodic basis. The mechanism can be by signing a side letter with the portfolio company or adding a clause in the shareholder agreement to ensure the action plan is followed up.

3.4. Measurement & Monitoring

ESG team measure and monitor the financially material ESG indicators as identified in the due diligence annually. The indicators are original to Mundi Ventures guided by ILPA and SFDR PAI (Principle Adverse Impact) indicators as defined by Commission Delegated Regulation (EU) 2022/1288.
3.5. Value Creation
Mundi Ventures have an ESG scoring method to evaluate the level of maturity of portfolio companies. Based on the current score, both investment team and ESG team work with portfolio companies to improve this score. ESG team have periodic meetings with portfolio companies to support them and provide training and resources for portfolio companies on relevant ESG factors.

4. ESG Governance Structure

4.1. ESG Committee

Mundi Ventures takes a ‘whole firm’ approach to our ESG operation, however, these efforts are principally driven by Mundi Ventures’ ESG Committee which comprises members of the Mundi Ventures’ board of directors and senior management from across the Firm’s functions. We organize ESG committee at least annually to decide the Firm’s ESG strategy. The Committee member includes,

• Javier Santiso (General Partner, Chief Executive Officer)
• Moises Sanchez (General Partner, Chief Legal Officer)
• Partners of each fund
• Investment Directors of each fund
• Yoko Kojima (Associate, Head of ESG)

ESG Committee has an oversight function over the ESG team and the firm’s ESG operation including;

• ESG metrics and disclosure in Comisión Nacional del Mercado de Valores (CNMV) and financial filings

• ESG-related investment analysis and risk management post investment

• Cybersecurity

• Ethics compliance and anti- corruption

• Employee/whistleblower complaints relating to DE&I or other ESG matters

• Compliance with ESG regulations (e.g., cybersecurity, privacy, human rights, child and forced labor, climate and environmental matters, product safety, research and development, and supply chain), i.e., if the audit committee already exercises oversight over regulatory, compliance and litigation matters

• ESG-related litigation risks

4.2. Remuneration linked to ESG performance

At Mundi Ventures, we are committed to aligning our actions with our principles. To ensure this, we have implemented an ESG-linked remuneration structure, whereby a portion of each team member's compensation is directly tied to the ESG performance of our investment activities. This approach reinforces our dedication to integrating sustainability into our operations and incentivizing accountability across the firm.